How do small interfering RNAs (siRNAs) and PIWI-interacting RNAs (piRNAs) regulate gene expression and protect the genome? RNAi encompasses the cellular response to exogenous double-stranded RNA (dsRNA)-delivered experimentally or generated during a viral infection-and the response to parasitic genetic elements, such as transposons and highly repeated sequences. Our experimental strategy uses Drosophila melanogaster as a model system, because flies combine outstanding genetic, biochemical, and phenotypic tools. Aim 1 will explore why Drosophila Dicer-1 and Dicer-2 use ATP. Dicer enzymes make siRNAs and miRNAs. Dicer enzymes contain protein motifs that suggest they are ATPases. The function of Dicer proteins is modified by their dsRNA-binding partner proteins-Loquacious (Loqs) and R2D2 in flies. How do R2D2 and the three different isoforms of Loqs extend or restrict the function of Dicer-1 and Dicer- 2? siRNAs associate with the protein Argonaute2 to form the RNA-induced silencing complex (RISC), which mediates RNAi. In Aim 2, new technologies will be used to study the function of RISC, including single-molecule fluorescence techniques to study the cycle of RISC function, and deep sequencing methods that allow us to compare millions of different sequences in a single experiment to test the contribution of each siRNA nucleotide to binding and catalysis. Aim 3 proposes to define the biological functions of endogenous siRNAs. One function of endo-siRNAs is to protect the somatic genome from transposon expression, but endo-siRNAs also map to convergently transcribed mRNAs, and at least one endo-siRNAs acts in trans to regulate expression of an highly complementary mRNA. A combination of genetics, high throughput sequencing, and bioinformatic analysis will be employed to define the target repertoire of Drosophila endogenous siRNAs. Aim 4 seeks to identify the role of Drosophila piRNAs in epigenetic silencing. piRNAs provide the primary genomic defense in the germ line against transposons and repetitive sequence elements, yet how they are produced or how they suppress transposon or cellular gene expression remains unknown. Of particular interest is testing the idea that piRNAs acting early in development can set the epigenetic state of genes whose expression and phenotypic consequences can be observed only in the adult fly.